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Opinion Contributor

On budget, 10 is not enough

The second reason to look 25 years ahead is because that’s where the savings can be achieved. Entitlements are the largest drivers of our growing long-term debt. They account for literally 100 percent of the projected increases in non-interest spending as a percentage of GDP in future decades. Entitlement reform, therefore, must be part of any viable long-term fiscal plan that stabilizes the debt.

If we are to reform entitlements, it’s only fair to give people time to prepare and adjust their savings plans. The Bowles-Simpson commission and others, including Rep. Paul Ryan (R-Wis.), proposed exempting people older than 55 from changes to Medicare. By definition, this means that such reforms won’t produce any savings within the 10-year window.

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In addition, finding, testing and implementing reforms to the key health care cost drivers will take time to yield results. There are no easy short-term fixes to our systemic health care challenges.

So looking at the 25-year budget horizon becomes a political necessity. If we reasonably expect elected leaders to agree to reforms, they will need to be able to demonstrate the benefits.

It’s hard enough for politicians to implement reforms that require sacrifice. It’s impossible if they can’t score any savings in the budget window being used. It’s no wonder that the recent focus has been on cuts to discretionary spending. Not only are they easier politically, but they are the only ones that yield scorable savings in the near term.

The problem is, they don’t do much for the long term. Eventually over-cutting key investments, like infrastructure and research and development, could do more long-term harm than good.

If we want to see action that addresses the real drivers of long-term debt, we need to be sure political leaders can get credit when it’s due.

Only by taking a longer view will the public likely understand the full scope of the fiscal problem and can our leaders build the political will to pass long-term fixes. For that reason, all future budgets, debt commissions and deficit-reduction packages should be scored using a 25-year budget window.

If we’re going to work together to address the real threat to the future U.S. economy, let’s make sure we can all see it.

Michael A. Peterson is the vice chairman of the Peter G. Peterson Foundation.

Thank you! Let's start with Obamacare, which is only 'balanced' through 10 years because the costs don't hit towards later in the ten years while revenue began up front. As soon as that 10 years is up, it will never be solvent again, nor was it designed to be. Obamacare is nothing but bad news for the country. All these new regulations drive up costs for insurance companies which pass along costs to employers or people purchasing plans. Even before the full implementation of Obamacare, doctors are retiring and fleeing in droves. Bad for patients. Some smaller hospitals are closing. Bad for patients. Employers can't afford the more expensive insurance required under Obamacare and aren't expanding if not shrinking, bad for jobs and patients. Insurance companies are raising premiums because of Obamacare's expensive requirements: bad for patients. Bad for jobs if those companies fold. Even the public option isn't attractive: I've been on public and private and there is NO comparison in quality of care. Bad for patients. And of course, the costs will be astronomically higher than projected like every other government program, which taxpayers get to cover. Bad for everyone!

The current law also says that come Mar 1, 2012, Medicare will no longer reimburse individuals involved in care, but give out a certain amount based solely upon diagnosis. This amount of money would not change based upon severity of the disease, length of stay, extra testing, etc. That means all doctors (and the hospital) will have to divide up the money in some way hopefully reflective of care given, and the result is projected to halve doctors' pay to a little over $100k. This might not be a big deal were medical education so long and expensive and malpractice so high. But Obamacare lacks any tort reform, so medical costs will continue to be high so that doctors can assure lawyers in court that they did everything possible to care for their patients, including unnecessary expensive tests and labs. Not that I blame them for not wanting to get their butts sued off. I blame Obamacare for leaving out changes to the biggest cost driver in medicine, but what do you expect from a bunch of lawyers?

If any of this is news, consider your sources. You've got to read both sides because both sides leave stuff out.

It’s hard enough for politicians to implement reforms that require sacrifice. It’s impossible if they can’t score any savings in the budget window being used. It’s no wonder that the recent focus has been on cuts to discretionary spending. Not only are they easier politically, but they are the only ones that yield scorable savings in the near term.

This comment should be the real take away from this article. Implementing credible reforms can mean political suicide for career politicians. "Scorable savings" equates to talking points to be exploited during campaigns.

Webster's provides the following definitions of politics:

1a : the art or science of government b : the art or science concerned with guiding or influencing governmental policy c : the art or science concerned with winning and holding control over a government

b. and c. are interconnected. The imperative need to win elections (short-term interest of career politicians) ensures that policy decisions reflect the same short-sighted motivation and thinking. Consequently, the political process, the art and science by which policy decisions are derived, devolves into a mere by-product of the imperative need to win elections by career politicians.

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